Plain-English definitions of AI, accounting, and SaaS-finance terms.
Statistical and mathematical analysis of financial risks using probability and data to price insurance and manage reserves.
Excess return of an investment relative to a benchmark index after adjusting for risk.
Simultaneous purchase and sale of equivalent assets to profit from price discrepancies across markets.
The strategic distribution of investments across asset classes — stocks, bonds, real estate, and cash — to balance risk and return based on goals and time horizon.
Model describing relationship between systematic risk and expected return for assets in equilibrium.
Valuing a company using trading multiples from publicly listed peer companies.
Interest calculated on both the initial principal and previously accumulated interest, enabling exponential growth of savings and investments over time.
Financial derivative transferring credit risk of a reference entity from protection buyer to protection seller.
A valuation method that estimates the present value of a company or investment by discounting projected future cash flows at an appropriate rate.
The automatic use of dividend payments to purchase additional shares of the same investment, compounding returns through increased ownership.
An investment strategy of investing a fixed dollar amount at regular intervals regardless of price, reducing the impact of market volatility over time.
An Exchange-Traded Fund — a basket of securities that trades on a stock exchange like an individual stock, combining diversification with intraday liquidity.
Net income attributable to common shareholders divided by weighted average shares outstanding.
Set of optimal portfolios offering highest expected return for each level of portfolio risk.
A dedicated savings reserve covering 3–6 months of living expenses to protect against unexpected financial disruptions.
The process of arranging for the management and distribution of assets during life and after death, minimizing taxes and ensuring wishes are carried out.
Legal obligation to act in another party's best interest, arising in relationships of trust and confidence.
Building quantitative representations of a company's finances to support decision-making and valuation.
Financial model assessing the accretion or dilution to acquirer EPS resulting from an acquisition.
Framework for constructing investment portfolios to maximize return for a given level of risk.
Computational technique using random sampling to model probability distributions of financial outcomes.
The process of realigning a portfolio's asset allocation back to target weights by selling overweight assets and buying underweight assets.
Market capitalization divided by net book value, indicating how much investors pay per dollar of assets.
A valuation metric comparing a company's stock price to its earnings per share, indicating how much investors pay for each dollar of earnings.
A profitability ratio measuring how efficiently a company generates net income from its total assets.
A profitability ratio measuring how much net income a company generates per dollar of shareholders' equity.
A measure of the gain or loss generated on an investment relative to its cost, expressed as a percentage.
An individual retirement account funded with after-tax dollars, offering tax-free growth and tax-free withdrawals in retirement.
Testing how a financial model's outputs change when individual input assumptions are varied.
Risk-adjusted return metric measuring excess return earned per unit of total volatility.
Risk-adjusted return metric using only downside deviation rather than total standard deviation.
An investment strategy of selling assets at a loss to offset capital gains or ordinary income, reducing current tax liability while maintaining portfolio exposure.
An individual retirement account funded with pre-tax or after-tax dollars, offering potential tax deductions now and tax-deferred growth until withdrawal.
An employer contribution to employees' 401(k) retirement accounts, typically matching a percentage of employee contributions up to a salary limit.
A tax-advantaged education savings account allowing after-tax contributions to grow tax-free and be withdrawn tax-free for qualified education expenses.
